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TMI Blog2018 (10) TMI 1847X X X X Extracts X X X X X X X X Extracts X X X X ..... of transmission', viz. the 'carriage' aspect of broadcasting, and does not have the power to regulate the 'content' of the broadcast (i.e. the channel and/or its constituent programmes)? b. Whether the impugned clauses, in fact, and in effect, regulate the content of the broadcast (i.e. the channel and/or its constituent programmes)? c. Whether the impugned clauses have a direct effect on the pricing and marketing of a television channel by the broadcaster and hence is an illegal interference with the content of the broadcast (i.e. the channel and/or its constituent programmes)? The appellants have contended that the impugned clauses have the effect of regulating programmes and television channels, their pricing and their marketing and manner of offering/ bundling in the following illustrative manner, which is beyond the scope of TRAI's jurisdiction of regulating "means of transmission": a. TRAI has effectively fixed a uniform maximum retail price for each TV channel at INR 19/-; b. TRAI has stipulated that a television channel, which is individually priced at more than INR 19/- cannot be included in a collection of television channels (commonly referred to as a "bouquet" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther purpose of the provisions which we have struck down. Therefore, the other impugned provisions, i.e., clause 11(2) in the said Regulations as also clause 4(2) in the said tariff order will continue to be in the books, but cannot be pressed into service for anything to do with the provisions which we have struck down supra. In other words, these provisions, i.e., clause 11(2) in the said Regulations as also clause 4(2) in the said tariff order can be operated if it can be operated for other provisions of the said Regulations and said tariff order, other than those which we have struck down." 3. Differing from M. Sundar, J., the learned Chief Justice held:- "69. I am unable to agree with the conclusion of M. Sundar, J. that the provisions of the impugned Regulation and the impugned Tariff Order are not in conformity with the TRAI Act. In my view the impugned provisions neither touch upon the content of programmes of broadcasters, nor liable to be struck down. However, the clause putting cap of 15% to the discount on the MRP of a bouquet is arbitrary. The said provision is, in my view, not enforceable. In my considered view, the challenge to the impugned Regulation and the impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... difference. Accordingly, the dissenting judgment stands concurred. 28. In the result, this reference qua points of difference stands ordered concurring with the dissenting judgment. No costs." 5. Dr. A.M. Singhvi, learned Senior Advocate appearing on behalf of the appellants, has referred to several statutes and judgments in the course of his detailed submissions. According to the learned Senior Advocate, the TRAI Act was amended in 2000, as a result of which the TRAI Act was extended to broadcasting services which were undefined. By a Central Government notification dated 9.1.2004, the TRAI Act was expressly extended to broadcasting services, and certain functions were allocated to TRAI in addition to those contained in Section 11(1)(a) of the TRAI Act, as also to specify norms and periodicity of revision of rates of pay channels. According to the learned Senior Advocate, the definition of "telecommunication service" contained in Section 2(1)(k) of the TRAI Act only enables TRAI to regulate transmission or reception of broadcasting services, which essentially relates to regulatory measures taken for carriage of these signals. According to the learned Senior Advocate, his client ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntent, is governed by the Copyright Act and not by the TRAI Act, whereas transmission and delivery to the consumer, namely, carriage, alone pertains to TRAI's jurisdiction. According to him, the impugned clauses of the Regulation as well as the Tariff Order impact and have the effect of regulating pricing and terms and conditions of licensing of TV channels, including their packaging, bundling and other manner of offering the said channels and their underlying programmes, being films, TV shows, etc., which are all aspects of intellectual property rights covered by the Copyright Act. He relied heavily upon the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007 (hereinafter referred to as the "Sports Act"), by way of contrast, and stated that in this Act the definitions of "broadcaster", "broadcasting", "broadcasting service" and "content" made it clear that the reach of this Act was not merely confined to transmission of signal but extended to content as well, and argued that the difference therefore in the definitions contained in the Sports Act would show that the reach of the TRAI Act in contrast was limited and did not go to content. He also relied str ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the said Act. According to the learned Senior Advocate, from the stage of the teleport from which a TV channel is uplinked by a broadcaster to a satellite and then downlinked to an MSO, permissions of the Central Government have to be taken for both uplinking and downlinking, under guidelines issued, which he took us through. The said guidelines would show that content is certainly regulated at this stage, as TV channels which are contrary to the security of the state, for example, would not be allowed to be beamed. According to him, regardless of whether the teleport from which the broadcaster's signal is uplinked to a satellite is owned by the broadcaster, or is beamed by a person other than the broadcaster, a licence under Section 4 of the Telegraph Act and Section 5 of the Wireless Telegraphy Act is a sine qua non for operating a teleport and that therefore it is wholly fallacious to say that broadcasters need not be licencees under the Telegraph Act when they broadcast signals, either from their own teleport, or in conjunction with the owner of a teleport, which reach the ultimate consumer in India. According to the learned Senior Advocate, therefore, a constricted reading o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ters, which was why content was referred to in the said Act. He reiterated that at no stage does TRAI seek to or in fact regulate content of what is broadcasted so that any reference to this Act would be wholly irrelevant for the purpose of deciding this case. He also strongly relied upon Sections 3AA and 4 of the Telegraph Act to buttress his submission. According to him, since the Copyright Act operates in a distinct and separate field from the TRAI Act, equally the red herring of the Copyright Act would have no real relevance to the powers and functions of TRAI acting under the TRAI Act. He also cited certain decisions which will be referred to later in this judgment. 8. Shri Vikas Singh, learned Senior Advocate also appearing on behalf of TRAI, referred to Section 2(1)(k) of the TRAI Act in order to explain that the main provision and the proviso had to be harmonised in the manner suggested by the Delhi High Court in Star India Pvt. Ltd. v. TRAI, (2018) 146 DLT 455, and that, so harmonised, it is clear that the main provision did not include broadcasting services only for the time being. The proviso which was added by the Amendment Act of 2000 made it clear that the time had c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich has passed down from the broadcaster through the MSO to the cable operator to the consumer and/or through the DTH service provider to the consumer is over. He stressed the fact that this right comes in only when a re-broadcast or a subsequent second broadcast takes place after the original broadcast, which would not be covered by the Regulation or the Tariff Order in the present case. 11. Shri Krishnan Venugopal, learned Senior Advocate appearing for some of the consumers, referred to the Standing Committee of Parliament, in which it was pointed out that digitisation of cable TV services, by switching from the older analogue system in phases from 2012 onwards, had greatly increased the revenue of broadcasters and stated that these benefits could not possibly be denied by the broadcasters. In addition, the selfsame broadcasters have been regulated throughout and are raising questions relating to jurisdiction only after the present Regulation and Tariff Order have been made largely with their consent. He also cited certain decisions on the reach of TRAI under the TRAI Act. 12. Having heard learned counsel for the parties, it is important to first deal with the TRAI Act. In Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ranteed by Article 19(1)(a) of the Constitution. A citizen has the fundamental right to use the best means of imparting and receiving information and as such to have an access to telecasting for the purpose. However, this right to have an access to telecasting has limitations on account of the use of the public property, viz., the airwaves, involved in the exercise of the right and can be controlled and regulated by the public authority. This limitation imposed by the nature of the public property involved in the use of the electronic media is in addition to the restrictions imposed on the right to freedom of speech and expression under Article 19(2) of the Constitution. [iii] The Central Government shall take immediate steps to establish an independent autonomous public authority representative of all sections and interests in the society to control and regulate the use of the airwaves. [iv] Since the matches have been telecast pursuant to the impugned order of the High Court, it is not necessary to decide the correctness of the said order. Per Jeevan Reddy J.: 201. 1.(b) Airwaves constitute public property and must be utilised for advancing public good. No individual ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... private operator will be competing with Government operators, there is a pressing need for an independent telecom regulatory body for regulation of telecom services for orderly and healthy growth of telecommunication infrastructure apart from protection of consumer interest. 2. In view of above, it was proposed to set up an independent Telecom Regulatory Authority as a non-statutory body and for that purpose the Indian Telegraph (Amendment) Bill, 1995 was introduced and then passed by Lok Sabha on 6th August, 1995. At the time of consideration of the aforesaid Bill in Rajya Sabha, having regard to the sentiments expressed by the Members of Rajya Sabha and of the views of the Standing Committee on Communication which expressed a hope that steps will be taken to set up a Statutory Authority, it is proposed to set up the Telecom Regulatory Authority of India as a statutory authority. 3. The proposed Authority will consist of a Chairperson and minimum two and maximum four members. A person who is or has been a Judge of the Supreme Court or Chief Justice of a High Court will be eligible to be appointed as a Chairperson of the authority. A member shall be a person who has held as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 2(1)(k), permitting the Central Government to notify other services to be telecommunication services including broadcasting services. The relevant provisions of the TRAI Act are, therefore, set out hereinbelow: "2(1) In this Act, unless the context otherwise requires,- xxx xxx xxx (e) "licensee" means any person licensed under sub-section (1) of Section 4 of the Indian Telegraph Act, 1885 (13 of 1885) for providing specified public telecommunication services; (ea) "licensor" means the Central Government or the telegraph authority who grants a licence under Section 4 of the Indian Telegraph Act, 1885; xxx xxx xxx (j) "service provider" means the Government as a service provider and includes a licensee; (k) "telecommunication service" means service of any description (including electronic mail, voice mail, data services, audio tax services, video tax services, radio paging and cellular mobile telephone services) which is made available to users by means of any transmission or reception of signs, signals, writing, images and sounds or intelligence of any nature, by wire, radio, visual or other electromagnetic means but shall not include broadcasting services. Prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inspection to any member of public on payment of such fee and compliance of such other requirement as may be provided in the regulations; (ix) ensure effective compliance of universal service obligations; (c) levy fees and other charges at such rates and in respect of such services as may be determined by regulations; (d) perform such other functions including such administrative and financial functions as may entrusted to it by the Central Government or as may be necessary to carry out the provisions of this Act: Provided that the recommendations of the Authority specified in clause (a) of this sub-section shall not be binding upon the Central Government: Provided further that the Central Government shall seek the recommendations of the Authority in respect of matters specified in sub-clauses (i) and (ii) of clause (a) of this sub-section in respect of new licence to be issued to a service provider and the Authority shall forward its recommendations within a period of sixty days from the date on which that Government sought the recommendations: Provided also that the Authority may request the Central Government to furnish such information or documents as may be necess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for all or any of the following matters, namely :- (a) the times and places of meetings of the Authority and the procedure to be followed at such meetings under sub-section (1) of Section 8, including quorum necessary for the transaction of business; (b) the transaction of business at the meetings of the Authority under sub-section (4) of Section 8; (c) [* * *] (d) matters in respect of which register is to be maintained by the Authority under sub-clause (vii) of clause (b) of sub-section (1) of Section 11; (e) levy of fee and lay down such other requirements on fulfilment of which a copy of register may be obtained under sub-clause (viii) of clause (b) of sub-section (1) of Section 11; (f) levy of fees and other charges under clause (c) of sub-section (1) of Section 11." 16. The proviso to section 2(1)(k) was challenged in the Delhi High Court, which challenge was repelled by the Delhi High Court in Star India Private Limited v. TRAI & Ors., (supra.). An SLP from the said judgment was also dismissed. Acting under Section 2(1)(k), the Central Government issued two notifications on 9.1.2004. S.O.44(E) reads as follows:- "S.O. 44(E). - In exercise of the powers confe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dcasters.- (1) No broadcaster shall engage in any practice or activity or enter into any understanding or arrangement including exclusive contracts with any distributor of television channels that prevents any other distributor of television channels from obtaining signals of television channel of such broadcaster for distribution. (2) Every broadcaster shall, within sixty days of receipt of written request from a distributor of television channels for obtaining signals of television channel or within thirty days of signing of interconnection agreement with the distributor, as the case may be, provide, on non-discriminatory basis, the signals of television channel to the distributor or convey the reasons in writing for rejection of the request if the signals of television channel are denied to such distributor: Provided that imposition of any term or condition by the broadcaster, which is unreasonable, shall be deemed to constitute a denial of request: Provided further that this sub-regulation shall not apply to a distributor of television channels, who requests signals of a particular television channel from a broadcaster while at the same time demands carriage fee for dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls of all its pay channels to the distributor of television channels- (a) within sixty days of commencement of these regulations; and (b) before launching of a pay channel. and simultaneously submit, for the purpose of record, a copy of the same to the Authority. (2) The reference interconnection offer, referred to in sub-regulation (1), shall contain the technical and commercial terms and conditions relating to, including but not limited to, maximum retail price per month of pay channel, maximum retail price per month of bouquet of pay channels, discounts, if any, offered on the maximum retail price to distributors, distribution fee, manner of calculation of 'broadcaster's share of maximum retail price', genre of pay channel and other necessary conditions: Provided that a broadcaster may include in its reference interconnection offer, television channel or bouquet of pay channels of its subsidiary company or holding company or subsidiary company of the holding company, which has obtained, in its name, the downlinking permission for its television channels from the Central Government, after written authorization by them. Explanation: For the purpose of these regul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference interconnection offer shall be published in the same manner as provided under the sub-regulations (1), (2), (3), (4), (5) and (6) of this regulation. (9) In the event of any amendment to the reference interconnection offer by a broadcaster under subregulation (8), the broadcaster shall give an option to all distributors, with whom it has written interconnection agreements in place, within thirty days from the date of such amendment and it shall be permissible to such distributors to enter into fresh interconnection agreement in accordance with the amended reference interconnection offer, within thirty days from the date of receipt of such option, or continue with the existing interconnection agreement. xxx xxx xxx 10. Interconnection agreement between broadcaster and distributor of television channels.- (1) No broadcaster shall provide signals of pay channels to a distributor of television channels without entering into a written interconnection agreement with such distributor of television channels. (2) No distributor of television channels shall distribute pay channels of any broadcaster without entering into a written interconnection agreement with such broadca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or 'pay'; and (b) the maximum retail price, per month, payable by a subscriber for each of its pay channel offered on a-la-carte basis: Provided that the maximum retail price of a pay channel shall be more than 'zero': Provided further that the maximum retail price of a channel shall be uniform for all distribution platforms. (3) It shall be permissible for a broadcaster to offer its pay channels in the form of bouquet(s) and declare the maximum retail price(s), per month, of such bouquet(s) payable by a subscriber: Provided that, while making a bouquet of pay channels, it shall be permissible for a broadcaster to combine pay channels of its subsidiary company or holding company or subsidiary company of the holding company, which has obtained, in its name, the downlinking permission for its television channels, from the Central Government, after written authorization by them, and declare maximum retail price, per month, for such bouquet of pay channels payable by a subscriber: Provided that such bouquet shall not contain any pay channel for which maximum retail price per month is more than rupees nineteen: Provided further that the maximum retail price per month of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed further that the network capacity fee, per month, for network capacity in the slabs of twenty five SD channels each, beyond initial one hundred channels capacity referred to in first proviso to subclause (1), shall, in no case, exceed rupees twenty excluding taxes: Provided also that one HD channel shall be treated equal to two SD channels for the purpose of calculating number of channels within the distribution network capacity subscribed. (2) Every distributor of television channels shall offer all channels available on its network to all subscribers on a-la-carte basis and declare distributor retail price, per month, of each pay channel payable by a subscriber: Provided that the distributor retail price, per month, payable by a subscriber to a distributor of television channels for subscribing to a pay channel shall, in no case, exceed the maximum retail price, per month, declared by the broadcasters for such pay channel. (3) Every distributor of television channels shall offer to all subscribers each bouquet of pay channels offered by a broadcaster, and for which interconnection agreement has been signed with that broadcaster, without any alteration in its compositio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... els shall charge any amount, other than the network capacity fee, from its subscribers for subscribing to free-to-air channels or bouquet(s) of free-to air channels. (7) Within the distribution network capacity subscribed, in addition to channels notified by Central Government to be mandatorily provided to all the subscribers, a subscriber shall be free to choose any free-to-air channel(s), pay channel(s), or bouquet(s) of channels offered by the broadcaster(s) or bouquet(s) of channels offered by distributors of television channels or a combination thereof: Provided that if a subscriber opts for pay channels or bouquet of pay channels, he shall be liable to pay an amount equal to sum of distributor retail price(s) for such channel(s) and bouquets in addition to network capacity fee. (8) Subject to sub-clause (1) of clause 4, a distributor of television channels shall not increase the network capacity fee for a period of six months from the date of such notification: Provided that a distributor of television channels, before making any change in the network capacity fee, shall at least thirty days prior to the scheduled change--- (a) inform the Authority; and (b) inform t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et and not as a-la-carte. No such restriction on broadcaster under Copyright Act. 3. Second proviso to 3(2)(b) - MRP of all pay channels to be uniform across distribution platforms. Under Section 33A read with Rule 56 of the Copyright Rules, 2013, broadcaster has the right to decide separate MRP for different category of audience. 4. First proviso to 3(3) - Bundling of third party channels prohibited. Impinges upon broadcaster's ability to package a TV channel. For example, third party channels cannot be part of the same bouquet. No such restriction on broadcaster under Copyright Act. 5. Second proviso to 3(3) - MRP of pay channel in bouquet not to exceed INR 19/- Directly regulates the pricing of a TV channel, thereby also regulating pricing of individual programmes. 6. Third proviso to 3(3) - Bouquet price shall not be less than 85% of the sum of a-la-carte prices of individual channels in the bouquet. Directly regulates the pricing of a TV channel, thereby also regulating pricing of individual programmes. 7. Fourth proviso to 3(3) - MRP of all bouquets to be uniform across distribution platforms. Under Rule 56 of the Copyright Rules, 2013, broadcaster has the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c therein, it has become necessary for the State to step in and regulate the activity of fixation of maximum rates of admission to different classes, as a welfare weal. Thereby fixation of rates of admission became a legitimate ancillary or incidental power in furtherance of the regulation under the Act. Access to and admission into theatre is a facility and concomitant right to a cinegoing public. Classification of seats and fixation of rates of admission according to paying capacity of a cinegoer is also an integral power of regulation. Power to fix rates of admission includes power to amend and revise the rates from time to time. The statute vests that power in the licensing authority subject to control by the State Government. The fixation of the rates of admission has thus become an integral and essential part of the power and regulation of exhibition of cinematograph." (Emphasis supplied.) 21. In BSNL v. TRAI, (2014) 3 SCC 222, this Court held: "80. After the Amendment of 2000, TRAI can either suo motu or on a request from the licensor make recommendations on the subjects enumerated in Sections 11(1)(a)(i) to (viii). Under Section 11(1)(b), TRAI is required to perform nin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rohibit'. This is true in a general sense and in the sense that mere regulation is not the same as absolute prohibition. At the same time, the power to regulate carries with it full power over the thing subject to regulation and in absence of restrictive words, the power must be regarded as plenary over the entire subject. It implies the power to rule, direct and control, and involves the adoption of a rule or guiding principle to be followed, or the making of a rule with respect to the subject to be regulated. The power to regulate implies the power to check and may imply the power to prohibit under certain circumstances, as where the best or only efficacious regulation consists of suppression. It would therefore appear that the word 'regulation' cannot have any inflexible meaning as to exclude 'prohibition'. It has different shades of meaning and must take its colour from the context in which it is used having regard to the purpose and object of the legislation, and the Court must necessarily keep in view the mischief which the legislature seeks to remedy. 20. The question essentially is one of degree and it is impossible to fix any definite point at which 'regulation' ends and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arious provisions of the TRAI Act including Sections 11, 12 and 13. The exercise of power under Section 36(1) is hedged with the condition that the regulations must be consistent with the TRAI Act and the rules made thereunder. There is no other restriction on the power of TRAI to make regulations. In terms of Section 37, the regulations are required to be laid before Parliament which can either approve, modify or annul the same. Section 36(2), which begins with the words "without prejudice to the generality of the power under subsection (1)" specifies various topics on which regulations can be made by TRAI. Three of these topics relate to meetings of TRAI, the procedure to be followed at such meetings, the transaction of business at the meetings and the register to be maintained by TRAI. The remaining two topics specified in clauses (e) and (f) of Section 36(2) are directly referable to Sections 11(1)(b)(viii) and 11(1)(c). These are substantive functions of TRAI. However, there is nothing in the language of Section 36(2) from which it can be inferred that the provisions contained therein control the exercise of power by TRAI under Section 36(1) or that Section 36(2) restricts the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the balance that was sought to be maintained between protecting the interest of service providers and consumers was destroyed by the impugned regulations. What is important from our point of view, however, is that under Section 36 of the TRAI Act, the Authority is empowered to carry out the purposes of the said Act as can be discerned from the Preamble to the Act. What is clear from the amended Preamble to the Act is that the interests of service providers and consumers are of paramount importance, both of which have a role to play when regulations are framed under Section 36. 24. Learned counsel for the appellants also relied upon Petroleum and Natural Gas Regulatory Board v. Indraprastha Gas Ltd. (supra.). In this case, the Petroleum and Natural Gas Regulatory Board Act, 2006 was the subject matter of discussion by this Court. This Court, after construing the Act, held that where there is a cassus omissis, such lacuna cannot be filled up by the judicial interpretative process. Thus, entities which are neither "common carriers" nor "contract carriers" within the tariff regulating powers of the Board under the Act were not held amenable to regulation. Further, the reach of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y part of India. Explanation.- The payments made for the grant of a licence under this sub-section shall include such sum attributable to the Universal Service Obligation as may be determined by the Central Government after considering the recommendation made in this behalf by the Telecom Regulatory Authority of India established under sub-section (1) of Section 3 of the Telecom Regulatory Authority of India Act, 1997 (24 of 1997). (2) The Central Government may, by notification in the Official Gazette, delegate to the telegraph authority all or any of its powers under the first proviso to sub-section (1). The exercise by the telegraph authority of any power so delegated shall be subject to such restrictions and conditions as the Central Government may, by the notification, think fit to impose." 26. Sections 2(2) and 5 of the Indian Wireless Telegraphy Act, 1933 are also set out hereinbelow: "2(2) "wireless telegraphy apparatus" means any apparatus, appliance, instrument or material used or capable of use in wireless communication, and includes any article determined by rule made under Section 10 to be wireless telegraphy apparatus, but does not include any such apparatus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xxx 5. BASIC CONDITIONS/OBLIGATIONS 5.1. The Company permitted to downlink registered channels shall comply with the Programme and Advertising Code prescribed under the Cable Television Networks (Regulation) Act, 1995. 5.2. The company shall ensure compliance of the provisions of Sports Broadcasting Signals (Mandatory sharing with Prasar Bharati) Act 11 of 2007 and the Rules, Guidelines, Notifications issued thereunder. 5.3. The applicant company shall adhere to any other Code/Standards guidelines/restrictions prescribed by Ministry of Information & Broadcasting, Government of India for regulation of content on TV channels from time to time. 5.4. The applicant company shall submit audited annual accounts of its commercial operations in India. 5.5. The applicant company shall obtain prior approval of the Ministry of Information and Broadcasting before undertaking any upgradation, expansion or any other changes in the downlinking and distribution system/network configuration. 5.6. The applicant company shall provide Satellite TV Channel signal reception decoders only to MSO/Cable Operators registered under the Cable Television Networks (Regulation) Act 1995 or to a DTH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the necessary monitoring facility at its own cost for monitoring of programmes or content by the representative of the Ministry of Information and Broadcasting or any other Government agency as and when required. 5.15. The applicant company shall comply with the obligations and conditions prescribed in the downlinking guidelines issued by the Ministry of Information and Broadcasting, and the specific downlinking permission agreement and registration of each channel. 5.16. In the event of any war, calamity/national security concerns, the Government shall have the power to prohibit for a specified period the downlinking/reception/transmission and retransmission of any or all channels. The Company shall immediately comply with any such directions issued in this regard." 30. We are of the view that the provisions of the TRAI Act have to be viewed in the light of protection of the interests of both service providers and consumers. This being so, it is clear that no constricted meaning can be given to the provisions of this Act. It is important to remember that under Section 11(1)(a)(iv), one of the functions of the Authority, though recommendatory, is to facilitate competition and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act, in Avishek Goenka v. Union of India, (2012) 5 SCC 275, this Court has already held: "18. If one examines the powers and functions of TRAI, as postulated under Section 11 of the Act, it is clear that TRAI would not only recommend, to DoT, the terms and conditions upon which a licence is granted to a service provider but has to also ensure compliance with the same and may recommend revocation of licence in the event of non-compliance with the regulations. It has to perform very objectively one of its main functions i.e. to facilitate competition and promote efficiency in the operation of the telecommunication services, so as to facilitate growth in such services. It is expected of this regulatory authority to monitor the quality of service and even conduct periodical survey to ensure proper implementation." 32. We must also hasten to add that the power under Section 36(1) of the Act is very wide and not constricted by the provisions of Section 11, as was held in BSNL v. TRAI (supra.). 33. Equally, in Hotel & Restaurant Assn. v. Star India (P) Ltd., (2006) 13 SCC 753, this Court has held:- "24. Section 11 of the TRAI Act provides for the functions of TRAI. Clause (a) of sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nels have been suffering from legacy price and bouquet freeze. * All channels should earn fair share of consumers' ARPU. * Our research findings reveal that basis current ARPUs, share of viewership of flagship channels, and existing revenue share of the broadcasters in the addressable market, the value attributed by the market to the flagship channels is significantly more than the existing wholesale list prices of these channels. * Accordingly, the retail value ascribed to flagship entertainment channels by consumers, translate into a wholesale price of Rs. 11/- to Rs. 28/-. For details refer to Annexure A. * Therefore, the wholesale cap should be Rs. 28/- to allow for optimum monetization of the flagship channels. If the channel values are allowed to be corrected basis consumer demand the share of the channel in the ARPUs shall be realigned to reflect their true value proposition without leading to any arbitrary or perverse price hikes. Further the proposed discount cap will effectively eliminate pricing distortions. * However, in the interest of enabling a smooth and seamless transition to full addressability without creating any unnecessary chaos we are proposing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been possible because of the laudable decision of the Authority to keep HD channels outside the regulatory purview. With upcoming 3D, 4D and virtual reality it would indeed be a regressive step if the Authority were to now regulate HD channels thereby sending out a negative signal to potential investments in these technologies. - Hence we recommend that the Authority should continue to keep HD channels outside the regulatory ambit. - In order to protect the interest of subscribers and to foster further growth in this segment, we recommend that HD channels should adhere to twin conditions and discounting caps at the wholesale and retail. - Discount on wholesale prices should be capped at 33% to ensure a viable a-la-carte fallback option for DPOs. - Retail a-la-carte prices should be linked to wholesale prices (same linkage multiplier as used for SD channels). - Discount at retail level also to be limited to 33% to ensure a viable a-la-carte fallback option for consumer. 3. Bundling of HD and SD channels should not be allowed, both at wholesale and retail levels. 4. Charging of access fee for HD channels should not be allowed at retail level. 5. DPOs free to sell HD c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of upto 80%-90% of the sum of a-la-carte rates of pay channels constituting those bouquets. These discounts are based on certain eligibility criteria/conditions to be fulfilled by the distributor of television channels in order to avails those discounts from broadcasters. Such high discounts force the subscribers to take bouquets only and thus reduce subscriber choice. As a result, while technically, a-la-carte rates of channels are declared, these are illusive and subscribers are left with no choice but to opt for bouquets. Bouquets formed by the broadcasters contain only few popular channels. The distributors of television channels are often asked to take the entire bouquet as otherwise they are denied the popular channels altogether or given such popular channels at RIO rates. To make the matters worse, the distributors of television channels have to pay as if all the channels in the bouquet are being watched by the entire subscriber base, when in fact only the popular channels will have high viewership. In such a scenario, at the retail end, the distributors of television channels somehow push these channels to maximum number of subscribers so as to recover costs. This mark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tworks (Regulation) Amendment Bill, 2011, the then Minister of Information and Broadcasting emphasised the need to establish a system for subscribers to choose a-la-carte channels of choice. The Authority has also made several attempts in this regard, but for one or the other reason could not succeed. Here it is important to understand that the Authority has not been able to do pricing of channels in the absence of pricing of content. Present trends indicate that majority of channels are priced much below the prevailing ceiling, but higher ceilings were prescribed to give flexibility to broadcasters to monetise their channels and freedom to do business. Further, different channels even in the same genre may have varying cost of production and potential to monetise, but within the framework. A broadcaster may price even nondriver channels at a much higher value that they can command. Non-discovery of reasonable price of a channel in a market is one of the constraints that can be manipulated and misused to price a channel in a-la-carte from which is illusionary. Such high ala-carte prices permits broadcasters/distributors to provide high discounts to push non-drivers channels in form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect to subscribers at retail level will be a discount of approximately 30% on the bouquets of channels. Therefore flexibility of formation of bouquet has been given to broadcasters and MSOs both to such an extent that total permissible discount does not kill the a-la-carte choice. The Authority has been careful in prescribing a framework which does not encourage non-driver channel to be pushed to subscribers against their choice. Non-driver channels which are provided as part of bouquets not only kill choice of the ala-carte channels but also eat away the channel carrying capacity available with distributors which may result in artificial capacity constraints at distribution platforms for launch of new/competitive channels. Such restrictions are anti-subscriber and have to be carefully handled. Accordingly, the Authority has consciously decided the present framework of prescribing relationship between a-la-carte and bouquet prices to protect interest of customers/viewers and as well as those of service providers. However, the Authority will keep a watch on the developments in the market and may review the maximum permissible discount while offering a bouquet, in a time period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y channels that are found in these bouquets are much higher. This results in perverse pricing of bouquets vis-à-vis individual pay channels. In the process, the public ends up paying for unwanted channels, thereby blocking newer and better TV channels and restricting subscribers' choice. It is for this reason that discounts are capped. While doing so, however, full flexibility has been given to broadcasters to declare the prices of their pay channels on an a-la-carte basis. The Authority has shown that it does not encroach upon the freedom of broadcasters to arrange their business as they choose. Also, when such discounts are limited, a subscriber can then be free to choose a-la-carte channels of his choice. Thus, the flexibility of formation of a bouquet, i.e., the choice of channels to be included in the bouquet together with the content of such channels, is not touched by the Authority. It is only efforts aimed at thwarting competition and reducing a-lacarte choice that are, therefore, being interfered with. Equally, when a ceiling of INR 19 on the maximum retail price of pay channels which can be provided as a part of a bouquet is fixed by the Authority, the Authority's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and transmitting it through space or cables to make it continuously available on the carrier waves, or continuously streaming it in digital data form on the computer networks, so as to be accessible to single or multiple users through receiving devices either directly or indirectly; and all its grammatical variations and cognate expressions; (c) "broadcasting service" means assembling, programming and placing communication content in electronic form on the electro-magnetic waves on specified frequencies and transmitting it continuously through broadcasting network or networks so as to enable all or any of the multiple users to access it by connecting their receiver devices to their respective broadcasting networks and includes the content broadcasting services and the broadcasting network services; (d) "broadcasting networks service" means a service, which provides a network of infrastructure of cables or transmitting devices for carrying broadcasting content in electronic form on specified frequencies by means of guided or unguided electro-magnetic waves to multiple users, and includes the management and operation of any of the following: (i) Teleport/Hub/Earth Station; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Prasar Bharati for broadcasting other sporting events. xxx xxx xxx 5. Power of the Central Government to issue Guidelines.-The Central Government shall take all such measures, as it deems fit or expedient, by way of issuing Guidelines for mandatory sharing of broadcasting signals with Prasar Bharati relating to sporting events of national importance: Provided that the Guidelines issued before the promulgation of the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Ordinance, 2007 (Ord. 4 of 2007) shall be deemed to have been issued validly under the provision of this section." 40. Shri Dwivedi is therefore right that the object of the Sports Act has nothing to do with the validity of the Regulation and Tariff Order made by TRAI under the TRAI Act. Content is referred to in the Sports Act only for the reason stated in the Objects and Reasons. Secondly, as has correctly been argued by Shri Dwivedi and as has been held by us above, the TRAI Act, as well as the Regulation and Tariff Order, do not in any manner affect the content of the TV channels that are broadcast by the broadcasters in these cases. 41. Dr. Singhvi then relied upon the Cable TV Act as foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich includes hardware and its associated software) or more than one electronic device put in an integrated system through which signals of cable television network can be sent in encrypted form, which can be decoded by the device or devices, having an activated Conditional Access System at the premises of the subscriber within the limits of authorisation made, through the Conditional Access System and the subscriber management system, on the explicit choice and request of such subscriber, by the cable operator to the subscriber; (b) "basic service tier" means a package of free-to-air channels to be offered by a cable operator to a subscriber with an option to subscribe, for a single price to subscribers of the area in which his cable television network is providing service; (c) "encrypted", in respect of a signal of cable television network, means the changing of such signal in a systematic way so that the signal would be unintelligible without use of an addressable system and the expression "unencrypted" shall be construed accordingly; (d) "free-to-air channel", in respect of a cable television network, means a channel for which no subscription fee is to be paid by the cable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... likely to deprave, corrupt or injure the public morality or morals; (l) Denigrates children; (m) Contains visuals or words which reflect a slandering, ironical and snobbish attitude in the portrayal of certain ethnic, linguistic and regional groups; (n) Contravenes the provisions of the Cinematograph Act, 1952. (o) is not suitable for unrestricted public exhibition Provided that no film or film song or film promo or film trailer or music video or music albums or their promos, whether produced in India or abroad, shall be carried through cable service unless it has been certified by the Central Board of Film Cetification (CBFC)) as suitable for unrestricted public exhibition in India. Explanation - For the purpose of this clause, the expression "unrestricted public exhibition" shall have the same meaning as assigned to it in the Cinematograph Act, 1952 (37 of 1952); (2) The cable operator should strive to carry programmes in his cable service which project women in a positive, leadership role of sobriety, moral and character building qualities. (3) No cable operator shall carry or include in his cable service any programme in respect of which copyright subsists unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and advanced means of communications like broadcasting, litho-photography, etc., also call for certain amendments in the existing law", as a result of which certain rights akin to copyright are conferred on broadcasting authorities in respect of programmes broadcast by them. In this Act, as originally enacted, Section 2(v) defined "radio-diffusion" as follows: "2(v). "radio-diffusion" includes communication to the public by any means of wireless diffusions whether in the form of sounds or visual images or both." 45. Section 37, as originally enacted, recognised a broadcast reproduction right by radio-diffusion only by the Government or any other Authority of Government as follows: "37. Broadcast Reproduction Right (1) Where any programme is broadcast by radiodiffusion by the Government or any other broadcasting authority, a special right to be known as "broadcast reproduction right" shall subsist in such programme. (2) The Government or other broadcasting authority, as the case may be, shall be the owner of the broadcast reproduction right and such right shall subsist until twenty-five years from the beginning of the calendar year next following the year in which the progr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government for some time, taking into account the difficulties expressed by different groups of copyright owners and others, the experience gained from the administration of the existing law and the situation created by various technological developments that have taken place. 2. The Copyright Act, 1957 amended and consolidated the law relating to copyright in India. It was further amended by the Copyright (Amendment) Acts of 1983 and 1984 and certain improvements were effected. By the Copyright (Amendment) Act, 1992 the term of copyright was further extended by a period of ten years. Now, it is considered appropriate to further amend the provisions of the Copyright Act, 1957- xxx xxx xxx to further clarify the law in respect of cable, satellite and other means of simultaneous communication of works to more than one household or private place of residence, including the residential rooms of a hotel or hostel. xxx xxx xxx to further improve the functioning of the Copyright Board; to simplify and improve the law relating to copyright and related rights, in the interests of the general public, and in particular of the users as well as the owners of such rights." 52. Section 2(ff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' right in any performance as they apply in relation to copyright in a work: xxx xxx xxx" 55. Sections 33 and 33A, which have been relied upon by the learned counsel for the appellants, read as follows: "33. Registration of copyright society.- (1) No person or association of persons shall, after coming into force of the Copyright (Amendment) Act, 1994 commence or, carry on the business of issuing or granting licences in respect of any work in which copyright subsists or in respect of any other rights conferred by this Act except under or in accordance with the registration granted under sub-section (3): Provided that an owner of copyright shall, in his individual capacity, continue to have the right to grant licences in respect of his own works consistent with his obligations as a member of the registered copyright society: Provided further that the business of issuing or granting licence in respect of literary, dramatic, musical and artistic works incorporated in a cinematograph films or sound recordings shall be carried out only through a copyright society duly registered under this Act: Provided also that a performing rights society functioning in accordance with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (5) If the Central Government is of the opinion that in the interest of the authors and other owners of right concerned or for non-compliance of Section 33-A, sub-section (3) of Section 35 and Section 36 or any change carried out in the instrument by which the copyright society is established or incorporated and registered by the Central Government without prior notice to it, it is necessary so to do, it may, by order, suspend the registration of such society pending inquiry for such period not exceeding one year as may be specified in such order under sub-section (4) and that Government shall appoint an administrator to discharge the functions of the copyright society. 33A. Tariff scheme by copyright societies.- (1) Every copyright society shall publish its tariff scheme in such manner as may be prescribed. (2) Any person who is aggrieved by the tariff scheme may appeal to the Appellate Board and the Board may, if satisfied after holding such inquiry as it may consider necessary, make such orders as may be required to remove any unreasonable element, anomaly or inconsistency therein: Provided that the aggrieved person shall pay to the copyright society any fee as may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to address certain newer issues that have emerged in the context of digital technologies and the Internet. The two World Intellectual Property Organisation (WIPO) Internet Treaties, namely, WIPO Copyright Treaty (WCT), 1996 and WIPO Performances and Phonograms Treaty (WPPT), 1996 have set the international standards in these spheres. The WCT and the WPPT were negotiated in 1996 to address the challenges posed to the protection of Copyrights and Related Rights by digital technology, particularly with regard to the dissemination of protected material over digital networks such as the Internet. The member countries of the WIPO agreed on the utility of having the Internet treaties in the changed global technical scenario and adopted them by consensus. In order to extend protection of copyright material in India over digital networks such as internet and other computer networks in respect of literary, dramatic, musical and artistic works, cinematograph films and sound recordings works of performers, it is proposed amend the Act to harmonise with the provisions of the two WIPO Internet Treaties, to the extent considered necessary and desirable. The WCT deals with the protection for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants, makes it clear that broadcasters may, in fact, be the owners of the original copyright of a work - for example, if they themselves have produced a serial. They may also be the copyright owners of the broadcast of this serial which is a separate right under the Copyright Act which they are able to exploit, and if there is a rebroadcast of what has already been copyrighted, this again is protected by Chapter VIII of the Copyright Act. The argument, therefore, is that content that is carried by transmission from the broadcasters to the ultimate consumer is, therefore, regulated only by the Copyright Act and any royalties that can be charged for exploitation of the three rights as aforesaid are governed only by the Copyright Act. Further, the right to band themselves into a society is by virtue of Section 33, which mutatis mutandis applies to broadcasters alone. The tariff, therefore, that may be charged under Section 33A of the Copyright Act read with Rule 56 of the Copyright Rules is nothing but compensation that is payable to broadcasters for parting with their copyright in the manner indicated above. This being the case, when TRAI fixes rates and/or interferes with cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business, it shall frame a scheme of tariff to be called the "Tariff Scheme" under section 33A of the Act setting out the nature and quantum of royalties which it proposes to collect in respect of the right or the set of rights in the specific categories of works administered by it. (2) Every copyright society shall display its Tariff Scheme by posting it on its website. (3) The Tariff Scheme shall indicate the separate rates for- (a) different categories of users; (b) different media of exploitation, such as telephone, broadcast or internet; (c) different types of exploitation whether by an individual or by groups or whether single or multiple use or for advertising; (d) different durations of use and territory; and (e) any other differentiation factor indicated by the society, as it may deem fit. (4) While fixing the tariff the copyright society shall follow the guidelines issued by any Court or the Board, if any, and may consult the user groups. (5) The copyright society shall collect the royalties from a licensee in advance where the Tariff Scheme provides for lump sum payment of royalties. In cases where the Tariff Scheme provides for payments in installments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Certain acts not to be infringement of copright.- (1) The following acts shall no constitute an infringement of copyright, namely:- xxx xxx xxx (b) the transient or incidental storage of a work or performance purely in the technical process of electronic transmission or communication to the public;" 64. The picture that, therefore, emerges is that copyright is meant to protect the proprietary interest of the owner, which in the present case is a broadcaster, in the "work", i.e. the original work, its broadcast and/or its re-broadcast by him. The interest of the end user or consumer is not the focus of the Copyright Act at all. On the other hand, the TRAI Act has to focus on broadcasting services provided by the broadcaster that impact the ultimate consumer. The focus, therefore, of TRAI is that of a regulatory authority, which looks to the interest of both broadcaster and subscriber so as to provide a level playing field for both in which regulations can be laid down which affect the manner and carriage of broadcast to the ultimate consumers. Once the relative scope of both the enactments is understood as above, there can be no difficulty in stating that the two Acts operate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect to. In fact, Section 38 of the TRAI Act reads as under:- "38. Application of certain laws. - The provisions of this Act shall be in addition to the provisions of the Indian Telegraph Act, 1885 (13 of 1885) and the Indian Wireless Telegraphy Act, 1933 (17 of 1933) and, in particular, nothing in this Act shall affect any jurisdiction, powers and functions required to be exercised or performed by the Telegraph Authority in relation to any area falling within the jurisdiction of such Authority." 66. Since the Telegraph Authority, acting under the Telegraph Act and the Indian Wireless Telegraphy Act, is required to act in public interest, the jurisdiction of the said Authority is left untrammeled by the provisions of the TRAI Act. It can thus be seen that TRAI and the Telegraph Authority both act in public interest. The TRAI Act, the Telegraph Act and the Indian Wireless Telegraphy Act, being statutes in pari materia, form a Code, insofar as wireless telegraphy and broadcasting is concerned. 67. We are, therefore, clearly of the view that if in exercise of its regulatory power under the TRAI Act, TRAI were to impinge upon compensation payable for copyright, the best way in whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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